Novartis’ generics division Sandoz is planning to expand its antibiotics manufacturing network by boosting its production capabilities in Austria and Spain.
As part of those plans, Sanfoz will invest over €100m to introduce new manufacturing for the production of oral amoxicillin, used in its leading penicillin product, at its hub located in Kundl, Austria.
The investment will enable Sandoz to make use of its position in Kundl and develop this hub as the only major end-to-end antibiotics supply chain in Europe.
In July 2020, Sandoz announced a joint investment with the Austrian federal government to drive the long-term future of integrated antibiotics manufacturing in Europe.
The government funding primarily went towards new process technology to produce active pharmaceutical ingredients (API) for penicillin in Kundl, Austria. In return, Sandoz committed to related penicillin API production in Europe over the next ten years, despite increasing global price competition – in particular from China.
Sandoz is also planning to expand its Palafolls site in Spain, with around €50m earmarked for new production technology and increased capacity for the production of sterile penicillin API and sterile API mixtures.
As part of these new plans, Sandoz will also phase out its current production of oral APIs at its site located in Les Franqueses in Spain, which it is planning to close in 2024.
Under the network modernisation plans, all of Sandoz’s sterile API production is planned to transfer from Kundl to the new Palafolls facility in 2025.
“Antibiotics are the backbone of modern healthcare and a key strategic pillar of our business. Despite a temporary drop in demand due to the pandemic, we remain as confident as ever in the mid- to long-term prospects for this segment, which meets a significant quantity of the global disease burden,” said Richard Saynor, chief executive officer of Sandoz.
“This investment, which comes shortly after we announced plans to acquire GSK’s global cephalosporin antibiotics, confirms our commitment to securing the future of our leading global business,” he added.
In February, Sandoz signed an agreement with British drugmaker GlaxoSmithKline (GSK) to acquire its cephalosporin antibiotics brands for up to $500m.
Under the terms of the deal, Sandoz paid $350m upfront and will pay up to a further $150m in milestone payments for GSK’s well-established cephalosporins brands Zinnat, Zinacef and Fortum.
The three brands included in the deal brought in combined sales of around $140m in the relevant markets last year.